Tag: What Are Whistleblower Laws

Have you ever wondered, what are whistleblower laws?

Many individuals ask the question: What are whistleblower laws? Many might think it’s a law that deals with whistleblowers and they would be correct. There’s one thing about the law that many people do not know. It has to do with the reward system, which can make a huge difference for many ordinary people.

Background of the Whistleblower Law

The False Claims Act, also referred to as the whistleblower law or qui tam law, is a federal law to fight attempts to defraud the federal government. It was created during Civil War times. The False Claims Act originally went after dishonest businesses that tried to cheat the government when it sold wartime goods and supplies to the Union Army.

Today, the False Claims Act still targets businesses that sell goods to the United States military. But it also goes after fraudsters in many other industries, such as healthcare and construction.

With respect to ordinary citizens, the False Claims Act is special because of its qui tam, or whistleblower provision.

What Is the Qui Tam Provision?

The qui tam portion of the False Claims Act provides a reward to individuals who serve as whistleblowers for the federal government. This reward ranges from as little as 10% to as high as 30% of the money the government can recover from the violator.

But why is the federal government willing to give up almost a third of the money that it rightfully deserves? Because it’s very hard for the government to detect fraud and get enough evidence to prosecute it.

Estimates say that more than three-quarters of all lawsuits under the False Claims Act are the result of a whistleblower. This goes to show how important whistleblowers are. They help the federal government detect, stop and prosecute fraud. Therefore, the reasoning for giving the reward is that it’s better to get 70 cents on the dollar than zero cents on the dollar. The federal government understands that the best way to go after a fraudster is to find someone to help who has special access to the fraudulent activity.

The qui tam provision also means that sometimes those involved in the fraud end up being the whistleblower. It might seem unfair that one of the guilty people should get a reward for their crimes. But unfortunately, those involved in the fraud often serve as the best whistleblowers. That’s because they are extremely familiar with the fraud and can provide the best evidence. Also, the amount of the reward can be lower for those who committed fraud themselves or otherwise participated in it. This is often the reason why a qui tam reward will “only” be 10%, instead of the more usual 20% or 25%.

How the Qui Tam Provision Affects Regular People

The whistleblower provision under the False Claims Act most notably affects the ordinary citizen in two ways. One is positive and one is negative.

First, there is the reward. In large False Claims Act cases, there can be tens of millions of dollars at stake. So when everything is over, the whistleblower (also called a relator) can receive a seven figure reward. But this large reward requires a lot of work and time. It involves helping the federal government investigate the fraud and actually recover the stolen money. With a few million dollars, it’s easy to understand how the whistleblower’s life can change. Doing the right thing and bringing criminals to justice is a strong motivator. But it’s understandable that simply doing the “right thing” is not enough to persuade someone to risk his or her job and professional future to report fraudulent activity.

Second, there are serious negative consequences for blowing the whistle. There’s no way around the fact that in most situations, the whistleblower is at risk of professional harm. As a result of reporting the fraud and assisting the federal government by providing evidence of the fraud and information on how to recover the stolen money, a whistleblower can expect retaliation.

This retaliation is illegal under the False Claims Act, but it doesn’t mean it never happens. It can also be hard to successfully make a retaliation claim against an employer that takes subtle revenge against an employee. For example, it’s difficult to prove that a former employer blackballed the whistleblowing employee, resulting in the whistleblower having to change careers.

However, despite the difficulty in prosecuting retaliation, the penalties may prevent an employer from retaliating against the whistleblower. It may also minimize the retaliatory conduct the whistleblower must face.

Need More Information?

If you’re wondering about what is the whistleblower law, contact the skilled attorneys at Bothwell Law Group by calling 770.643.1606 today.